Sec. 3126. Entertainment, etc. expenses
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Subsection
(a)of section 274 is amended to read as follows: No deduction otherwise allowable under this chapter shall be allowed for amounts paid or incurred for any of the following items: With respect to an activity which is of a type generally considered to constitute entertainment, amusement, or recreation. With respect to membership in any club organized for business, pleasure, recreation or other social purposes. With respect to a de minimis fringe (as defined in section 132(e)(1)) that is primarily personal in nature and involving property or services that are not directly related to the taxpayer’s trade or business. With respect to a facility or portion thereof used in connection with an activity referred to in subparagraph (A), membership dues or similar amounts referred to in subparagraph (B), or an amenity referred to in subparagraph (C). Which is a qualified transportation fringe (as defined in section 132(f)) or which is a parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)). For purposes of applying paragraph (1), an activity described in section 212 shall be treated as a trade or business. Under the regulations prescribed to carry out this section, the Secretary shall include regulations— defining entertainment, amenities, recreation, amusement, and facilities for purposes of this subsection, providing for the appropriate allocation of depreciation and other costs with respect to facilities used for parking, and specifying arrangements a primary purpose of which is the avoidance of this subsection. . Paragraph
(2)of section 274(e) is amended to read as follows: Expenses for goods, services, and facilities, to the extent that the expenses do not exceed the amount of the expenses which are treated by the taxpayer, with respect to the recipient of the entertainment, amusement, or recreation, as compensation to an employee on the taxpayer’s return of tax under this chapter and as wages to such employee for purposes of chapter 24 (relating to withholding of income tax at source on wages). . Paragraph
(9)of section 274(e) is amended by striking to the extent that the expenses and inserting to the extent that the expenses do not exceed the amount of the expenses that . Paragraph
(3)of section 274(e) is amended to read as follows: Expenses paid or incurred by the taxpayer, in connection with the performance by him of services for another person (whether or not such other person is the taxpayer’s employer), under a reimbursement or other expense allowance arrangement with such other person, but this paragraph shall apply— where the services are performed for an employer, only if the employer has not treated such expenses in the manner provided in paragraph (2), or where the services are performed for a person other than an employer, only if the taxpayer accounts (to the extent provided by subsection (d)) to such person. Except as provided by the Secretary, subparagraph
(A)shall not apply— in the case of an arrangement in which the person other than the employer is an entity described in section 168(g)(2)(A), or to any other arrangement designated by the Secretary as having the effect of avoiding the limitation under subparagraph (A). . Subsection
(n)of section 274 is amended to read as follows: The amount allowable as a deduction under this chapter for any expense for food or beverages (pursuant to subsection (e)(1)) or business meals (pursuant to subsection (k)(1)) shall not exceed 50 percent of the amount of such expense or item which would (but for this paragraph) be allowable as a deduction under this chapter. Paragraph
(1)shall not apply to any expense if— such expense is described in paragraph (2), (3), (6), (7), or
(8)of subsection (e), in the case of an expense for food or beverages, such expense is excludable from the gross income of the recipient under section 132 by reason of subsection
(e)thereof (relating to de minimis fringes) or under section 119 (relating to meals and lodging furnished for convenience of employer), or in the case of an employer who pays or reimburses moving expenses of an employee, such expenses are includible in the income of the employee under section 82. In the case of any expenses for food or beverages consumed while away from home (within the meaning of section 162(a)(2)) by an individual during, or incident to, the period of duty subject to the hours of service limitations of the Department of Transportation, paragraph
(1)shall be applied by substituting 80 percent for 50 percent . . Section 274(d) is amended— by striking paragraph
(2)and redesignating paragraphs
(3)and
(4)as paragraphs
(2)and (3), respectively, and in the flush material following paragraph
(3)(as so redesignated)— by striking , entertainment, amusement, recreation, or in item (B), and by striking
(D)the business relationship to the taxpayer of persons entertained, using the facility or property, or receiving the gift and inserting
(D)the business relationship to the taxpayer of the person receiving the benefit . Section 274(e) is amended by striking paragraph
(4)and redesignating paragraphs (5), (6), (7), (8), and
(9)as paragraphs (4), (5), (6), (7), and (8), respectively. Section 274(k)(2)(A) is amended by striking (4), (7), (8), or
(9)and inserting (6), (7), or
(8). Section 274 is amended by striking subsection (l). Section 274(m)(1)(B)(ii) is amended by striking (4), (7), (8), or
(9)and inserting (6), (7), or
(8). The amendments made by this section shall apply to amounts paid or incurred after December 31, 2014.